By Jon Land
Situated 4000 metres above sea level, amongst the glaciers and tropical alpine valleys of the central highlands of West Papua, is Indonesia's biggest and most controversial mine, the Freeport-McMoran copper and gold operation at Grasberg.
Since 1967, the US-based company has extracted super-profits from the site, which is part of the resource-rich chain of mountains that extends through Ok Tedi and Porgera in Papua New Guinea to Bougainville in the east. As in those mining operations, there has been destruction of the environment and scant regard for the rights of landowners.
Operations first started at Ertsberg, two kilometres away, a once rocky outcrop rich in copper which has now been reduced to a 360-metre water-filled pit. It was the first major mining contract signed between the Suharto regime and a foreign company, playing an important political role following the ousting of Sukarno.
According to Freeport vice president Paul Murphy, interviewed by the Business Review Weekly, "We were appreciated by the government for sticking our necks out and investing at a time when there was a lot of uncertainty about the future of the country".
Freeport has developed a very close relationship with the Suharto regime and influential business interests since mining began. For most of the 27 years Freeport has been in West Papua, it has been Indonesia's biggest taxpayer.
While operation at Ertsberg has slowed down, finds at Grasberg and a site known as "Big Gossan" are enormous. The combined mineral reserves are estimated to exceed 1 billion tonnes of ore.
Initially attracted by copper, Freeport now also mines gold and silver. Company geologists say the mine is "open at depth" — in other words, a bottomless pit — containing the world's largest gold reserve and the second biggest open-pit copper mine. At current market prices, Freeport's copper reserves are worth US$23 billion, while its gold reserves total US$15 billion.
Last year Freeport produced a massive 300 million kg of copper and 787,000 oz of gold. With the world market steadily improving for both these minerals, Freeport has major plans for expansion, not only at Grasberg, but throughout the whole of West Papua.
"It is clearly fair to say that West Papua is the most prospective area for copper and gold exploration in the world. We have sown up a very significant part of those hunting grounds", claims Murphy. Freeport secured 2.5 million hectares additional to Grasberg were in 1989, as well as the controlling interest in a joint venture with Indonesian Eastern Mining, which holds a 1.1 million hectare concession. Freeport plans to increase investment in West Papua to at least $US3 billion by the end of the decade.
The construction and development of this mine have come at considerable social and environmental cost. For the indigenous Amungme people, it has destroyed traditional hunting grounds and brought an influx of thousands of migrants to the new mining town of Tembagapura, placing immense strain upon a very limited infrastructure. Since the early 1970s, 173,000 people have been resettled in West Papua through World Bank-sponsored "transmigration" schemes.
As the mining and exploration activity expanded, many more indigenous communities were forced to move. Thousands of hectares of unique high altitude terrain and forests have been cleared for hundreds of kilometres of roads and pipelines.
Protests from local people led to negotiations in January 1974, in which the company offered to provide some basic facilities — housing, school, health clinic and employment opportunities. The agreement turned out to be very much in the company's favour, excluding local people from any further say over development of the area. No mechanism for compensation was worked out.
Tensions between the local people and the company simmered until 1977, when they reached flashpoint. Angered and in desperation, the Amungme people, with the assistance of Free West Papua independence fighters, blew up the pipeline which carries the copper concentrate from the Freeport mine to the coast for export.
The Indonesian government responded by sending the air force to strafe and attack villages with cluster bombs. The uprising which followed throughout the region was brutally suppressed; the government forcibly resettled communities away from the mine near the coast. In June 1980, 216 people died during an epidemic that swept through the resettlement camp. This included more than 20% of the infant population.
Freeport has continued to maintain a close relationship with the Indonesian military. Murphy has praised the armed forces as "by and large a generally well-trained, efficient apparatus and, Dili notwithstanding, I am not aware of any major problems in Irian Jaya [West Papua]". The military personnel harass and detain those who speak out against the mine. Local police assist in the protection of company property.
Since the late '70s the situation has improved little for the local people. Many live in the shantytown on the outskirts of Tembagapura known as "Mud Town", which contrasts sharply with the luxury homes of Freeport staff. The company-provided school has no teacher, and the health centre is run by one civil servant with no medical training.
Freeport, with the assistance of the Indonesian government, is planning to establish a US$500 million settlement for 20,000 people closer to the coast. Dubbed "New Town", it is an attempt to solve the overcrowding problem at Tembagapura. There are fears that this will just create new problems.
Despite the employment opportunities promised by the company, only 13% of the 7400-strong work force come from West Papua. The working conditions in the mine are appalling. In one three-year period, there were four deaths and 143 serious industrial accidents. The low wages (US$2.50 a day) make the copper some of the cheapest in the world.
For almost two decades, the mine operation has been dumping thousands of tonnes of waste material into the local river system, which flows into the Arafura Sea. Freeport did not conduct an environmental impact assessment until 1984, the results of which have never been made public.
The company claims water quality is safe, but village gardens and fishing have been adversely affected. Silting from the tailings has been so bad as to change the natural water flow and create a flood plain near the coast which extends over at least 15 square kilometres of forest land, affecting the livelihood of the 1400 Mimika people living there.
Murray Addison, spokesperson for AKSI — Indonesia Solidarity Action, told Green Left, "Freeport is another mining disaster of the likes of Ok Tedi, the only difference being that the company and the Indonesian military have kept a tight lid on it. The activities of mining companies throughout the rest of Indonesia — many of which are Australian owned and controlled — mirror the destruction that has taken place in West Papua.
"For as long as they continue to operate unchecked, the environment and rights of people will always be a minor consideration."